PwC report: Investment in renewables jumped by 40% in 2011

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A new global mergers and acquisitions (M&A) report by PricewaterhouseCoopers (PwC) has revealed a massive 40% increase in renewable investment from 2010 to 2011. Investment in ‘new generation’ technologies – including solar, wind and biomass – leapt from US$38.2 billion in 2010 to a record US$53.5 billion in 2011, according to the report. The massive increase is due to a variety of factors, the most noteworthy of which are falling solar prices and the change in attitude towards nuclear power following the Fukushima crisis in March 2011.

With billion-dollar deals dominating the investment coffers, the report claimed that investment in solar technologies has escalated to such an extent that one in every three deals carried out was a solar deal. Investment in this segment is up 56% from US$10.2 billion to US$15.8 billion, while the solar and energy efficiency sectors combined saw a near-doubling of the deal value logged, accounting for 79% of the US$15.3 billion increase from 2010 to 2011.

Solar, wind and energy efficiency deals surpassed hydropower investment – usually the main driver and the largest component of overall renewables investments – for the first time.

Falling solar module prices is one of the factors behind this increase, although the PwC report cited a distrust in nuclear power following the Fukushima crisis as being a major driver in investment in other non-fossil fuel-based sources of electricity.

Paul Nillesen, a partner in PwC renewables, commented on the news: “Dealmaking in the renewables and energy efficiency sectors is intensifying as the sector evolves. Sustained high deal numbers and record total value reflect a maturing of the sector. The trend is all the more noteworthy given the uncertainty in the market and in government policies on renewables. We believe that deal flow will continue to be significant in the medium term.”

Further notes were provided on the data gathered for the writing of the report, including region-specific information on investment figure breakdowns:

  • European deals fell by 6%, but overall value rose 80% from US$16.7 billion to US$30 billion
  • North American deals fell by 5%; deal values also fell by 5% from US$13 billion to US412.4 billion
  • South American deal volumes rose by 90%; total deal values were up from US$3.2 billion to US$6.8 billion
  • Asia Pacific (including Australasia) deals were down 26%, but their overall value rose by 15% from US$4 billion to US$4.6 billion.

The full report is available here.

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